Weekly Market Review. 27th January to 1st February 2013

Transcription

1 Weekly Market Review 27th January to 1st February 2013

2 Contents International Equity Markets GCC Equity Markets Currencies Commodities Interest Rates

3 International Equity Markets S&P rose 0.68% and DJI Passed14000 by gaining 0.82% for the week. Stocks rallied for a fifth week due to better than expected earnings and on reports showing US payrolls rose last month. Among other economic reports, manufacturing in the US expanded more than forecasted in January. FTSE gained 1% last week on strong data from the US. BT group stocks rallied after the company posted higher than estimated earnings. Diageo Plc. advanced after analysts raised their share price forecast. Dax advanced on the last day of the week on US economic data, parings its weekly loss to 0.3%. Porsche stocks rallied as a hedge fund agreed not to appeal a court ruling dismissing a case against the company. Shanghai composite gained 5.57% last week, the biggest weekly advance since October The index fell after the release of a report showing that the nations manufacturing grew slower than expected. However the index rebounded after the purchasing managers index showed a rise to a two year high. Nikkei capped a 12 week winning streak as positive reports on earnings boosted the market and weaker yen added to the gain of exporter companies. S&P and DJI 6 month chart S&P DJI Nasdaq Comp Euro Stoxx FTSE Dax CAC Nikkei Hang Seng Brazil - Bovespa Russia - Micex BSE Sensex Shanghai Comp Shanghai Comp- 6 month chart

4 GCC Equity Markets Dubai and Abu Dhabi markets were the largest gainers last week with gains of 5.32% and 3.55% respectively. The bullish undertone was reflective of the positive fourth quarter earnings expectations. Emaar Properties dropped 3.1 percent on news that quarterly income dropped 28 percent to 512 million dirhams which was 5% below analyst estimates. Revenue climbed 20 percent to 2.68 billion dirhams, while its cost of sales jumped 50 percent. The drop follows a 30% rally last month. Nakheel PJSC needs to raise $898 million to build a mall on Palm Jumeirah alongside another shopping project called the Point and is evaluating finance options. Emirates Airlines sold $750 million of 12 year bonds priced to yield 4.51 percent. The amortizing bonds, maturing in February 2025, have a weighted average life of seven years. Dana Gas full year net profits rose 19.56% to $165 million as the company benefited from higher crude prices and also received payments for output in Egypt and Iraq. DEWA is said to have hired six banks to raise as much as $ 1billion from the sale of Islamic bonds. The proceeds will be used to repay loans and fund investment. The current yield to maturity on the 2016 and 2020 maturity bonds are at 2.66 and respectively. EmiratesNBD 4 th quarter net profit rose to 625 million dirhams, beating analyst estimates by 20%. Dubai Abu Dhabi Saudi Tadawul* Qatar Index Kuwait Price Index Oman MAM Bahrain All Share Egypt EGX Istanbul 100 Index RBS Mena TR * Saturday to Wednesday. All others Sunday to Thursday DFM Index - 6 Month Chart ADSM Index 1 Year Chart

5 Currencies USD weakened versus euro for the second week, bringing the currency down to the lowest since November 2011 as jobless rate unexpectedly rose to 7.9% from 7.8% adding to the expectation that FED will sustain its stimulus policy inline with its decision last year to hold the benchmark interest rate near zero as long as unemployment remains above 6.5% and inflation stays below 2.5%. EUR strengthened against most of its counter parts after a gauge of manufacturing rose more than expected to 47.9% in January. GBP declined for a fourth week against euro, the longest streak of declines since September as economic reports on consumer confidence and manufacturing suggested the UK economic recovery is petering out. South Korean won had its biggest weekly loss versus USD since May on concern a weaker yen will hurt the nation s export and after the government proposed a tax on securities trading to curb speculative flows. Asia dollar index fell for a second week and touched a two month low as Bank of Korea board member warned of a global currency war. China s Yuan dropped for the week versus the dollar as Bank of China cuts the PBOC Yuan s reference rate. EUR/USD 6 month Chart EUR / USD GBP / USD AUD / USD USD / JPY USD/ CHF USD/ CAD USD/ BRl USD/ RUB USD/ INR USD/ CNY DXY Index Dollar index 6 Month Chart

6 Commodities WTI gained 1.97% continuing to gain for the eighth week capping the longest weekly advances streak since August Brent advanced 3.07% last week due to limits on a pipeline linking the Midwest to the gulf coast. S&P s GSCI spot index climbed for the eight week, the longest rally since January 1996 on mounting speculation that the US and China s economy will rebound bolstering the demand for metals, energy and crops. Gold and silver gained last week as US hiring picked up in the past three months adding to the signs of an improvements in the US economy that may fuel inflation as the FED decides to continue stimulus. Copper, Nickel and aluminium advanced last week amid indications that economies are reviving in the US and china. Soybean futures advanced by 2.3% last week to a six week high on speculation that warm, dry weather will erode yields in Argentina, increasing demand for tightening US supplies. Gold spot Silver spot Copper-CMX Brent - ICE WTI - Nymex Wheat- CBOT Corn- CBOT Soybean- CBOT S&P GSCI Spot Index Baltic Dry Index Corn prices rose last week on speculation that china will increase imports to control the rising domestic prices. WTI - 6 Month Chart S&P GSCI Spot Index 6 Month Chart

7 Interest Rates US 10 year treasury yields advanced 7 basis points last week to the highest level since April after data on payrolls, consumer prices and manufacturing. The 30 year treasury yield reached 3.24% the highest since 5 th April. A gauge of dollar denominated emerging market bonds posted its biggest weekly retreat in eight months as investors shift assets into equities on prospects that higher corporate earnings will bolster stocks. UK 10 year Gilts decline with the yields rising 4 basis points on speculation that they will hold their bond buying program at 375 billion pounds. Italy s 10 year yields climbed to a four week high after a report showed that the consumer confidence declined more than expected to the lowest level in about 17 years. German 10 year bund yields reached the most since September after unemployment declined more than analysts forecast in January. USD- 1w Libor USD - 3m Libor USD - 6m Libor USD - 10yr AED-1m EIBOR AED-3m EIBOR AED-12m EIBOR UK - 10yr Japan - 10yr About 20 lenders to Dubai Group, controlled by Dubai Holding declined a debt restructure offer to receive 18.5 cents on the dollar in favour of full repayment over 12 years. U.S. 10 year bond yields 5 Year Chart UK 10 Year bond Yields 6 month Chart

8 Important notice This report was prepared by the Private Banking Unit of Mashreqbank psc ( Mashreq ) in the United Arab Emirates ( U.A.E. ). Mashreq is regulated by the Central Bank of the U.A.E. This report is provided for informational purposes and private circulation only and should not be construed as an offer to sell or a solicitation to buy any security or any other financial instrument or adopt any hedging, trading or investment strategy. Prior to investing in any product, we recommend that you consult with a professional financial advisor, taking into consideration investment objectives, financial circumstances and tax implication. While based on information believed to be reliable, we do not guarantee and make no express or implied representation as to the accuracy of this report or complete description of the securities markets or developments referred to in this report. The information, opinions, forecasts (if any), assumptions or estimates contained in this report are as of the date indicated and are subject to change at any time without prior notice. The stated price of any securities mentioned in this report is as of the date indicated and is not a representation that any transaction can be effected at this price. The risks related to investment products described in this report are not all encompassing and investors should refer to the relevant investment offer document for detailed information and applicable terms and conditions. Investment products, including treasury products, are not guaranteed by Mashreq or any of its affiliates or subsidiaries unless stated otherwise and are subject to investment risk, including loss of principal. Investment products are not government insured. Past performance is not an indicator of future performance. US persons (US Citizens; US Green Card Holders; Resident Aliens subject to US income taxes for IRS purposes) are not eligible for any of the investment products introduced by Mashreq unless stated otherwise. This report is for distribution only under such circumstances as may be permitted by applicable law. Neither Mashreq nor its officers, directors or shareholders or other persons shall be liable for any direct, indirect, incidental or other damages including loss of profits arising in any way from the information contained in this report. This report is intended solely for the use by the intended recipients and the contents shall not be reproduced, redistributed or copied in whole or in part for any purpose without Mashreq s prior express consent.